What Comes After the Tax Bill? You Already Know.

Once again, a Republican Congress and a Republican president* are trying to sell to struggling Americans a tax plan that guarantees that more of the nation’s wealth will end up in the hands of people who already own a great deal of it. There is something of a difference this time around, in that the ultimate beneficiaries are being quite plain about what’s really going on.

For example, Speaker Paul Ryan, the zombie-eyed granny starver from the state of Wisconsin, is all over every platform pitching the notion that the enormous givebacks to corporations will result in an explosion of new jobs. This is typical fact-free supply-side palaver, except this time Ryan’s conand that of the White House—is being undercut by the very people of whom he has been such a reliable sublet. Bloomberg has been tracking some CEOs who happily have given away the game.

Major companies including Cisco Systems Inc., Pfizer Inc. and Coca-Cola Co. say they’ll turn over most gains from proposed corporate tax cuts to their shareholders, undercutting President Donald Trump’s promise that his plan will create jobs and boost wages for the middle class. The president has held fast to his pledge even as top executives’ comments have run counter to it for months. Instead of hiring more workers or raising their pay, many companies say they’ll first increase dividends or buy back their own shares. Robert Bradway, chief executive of Amgen Inc., said in an Oct. 25 earnings call that the company has been “actively returning capital in the form of growing dividend and buyback and I’d expect us to continue that.” Executives including Coca-Cola CEO James Quincey, Pfizer Chief Financial Officer Frank D’Amelio and Cisco CFO Kelly Kramer have recently made similar statements.

It is a regular theme at this shebeen that most of the people in upper reaches of the American corporate class have the essential civic conscience of a spirochete variant. Why should they have any at all? They’ve got a supine Congress and a steadily gutted regulatory structure that was pretty weak to start with. They’ve got a president* who’ll sign anything the Congress puts in front of him as long as it has “Tax Reform” written in big letters across the top. And they’ve got a political opposition that is just compromised enough that it can’t make a strong enough argument to stop the plutocratic freight train that’s roaring down the tracks. Why shouldn’t they be plain about what’s going on? It’s not like they have anything to lose.

Trump has insisted that the Republican tax plan cut the U.S. corporate rate to 20 percent from 35 percent. Another provision would impose an even lower tax rate on companies’ stockpiled overseas earnings, giving them an incentive to return trillions of dollars in offshore cash to the U.S. That money is also unlikely to spur hiring because companies are already well-capitalized and can bring on as many employees as they need, said John Shin, a foreign-exchange strategist at Bank of America Merrill Lynch.“Companies are sitting on large amounts of cash. They’re not really financially constrained,” Shin, who conducted a survey of more than 300 companies asking their plans for a tax overhaul, said in an interview. “They’re still working for their shareholders, primarily."

Also on today’s edition of This Week In Oligarchy, Lawrence O’Donnell had an interesting segment on his show Tuesday night with Gene Sperling, who had worked on economic issues in both the Clinton and Obama administrations. The topic was The Deficit and Sperling noted that, once this idiotic medley of Republican wet dreams goes into effect, the deficit will explode and then, poor souls, they’ll be “forced” to come after Medicare, Medicaid, and even Social Security. Bear in mind that I think Sperling’s predictions are absolutely correct. After all, the president* is already talking about “welfare reform,” and Mick (Double Dip) Mulvaney has been making growling noises in the direction of the endlessly embattled SSI program. But there’s a problem with Sperling making this argument, and it can be fairly summed up in the shebeen’s First Law of Economics: Fck The Deficit. People Got No Jobs. People Got No Money.

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In terms of the people who will be hurt by this bill, and by whatever mischief comes along after it, and certainly in terms of the immediate political concerns of those same people, The Deficit is about the fourth- or fifth-worst problem with what the Republicans are preparing to pass. Students will be hurt, so will the working poor. (God, Gene Sperling, enough with “the middle class.” When did Democrats decide that the poor were not part of the country?) Seniors will be immiserated. Health care will vanish for millions of Americans. Higher education will be shredded in an unprecedented fashion, leading to a loss of American leadership in science and research. Within the decades, taxes will rise to an insupportable level on the poor and the middle class. The president*’s family will get a tax break in the billions of dollars. How’m I doing so far? In the face of this vast and apparently now unavoidable fiscal calamity, concern for what may happen to The Deficit has to be pretty far down the line.

Worse, having Democrats like Sperling spouting off about The Deficit will help make Democrats complicit down the line in the inevitable Republican bait-and-switch on “entitlements” that Sperling correctly says is coming. If Democrats are bellyaching about exploding The Deficit now, how can they argue against Republican plans to exploit the explosion after it actually happens? Sperling’s emphasis on The Deficit boxes Democratic policy elites into a corner that they easily can avoid. You can see all of this coming, plain as day. People aren’t even trying hard to lie about it any more. It’s enough to give sad-faced Cassandra the blues. “At Cassandra's shout, no man or woman was left unaffected,” said the poet, and he wasn’t kidding.

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